Pig Farming Industry Emphasizes "Anti-Involution" – Shennong Group Terminates Private Placement
On the evening of July 28, two leading pig farming companies announced changes to their original private placement plans: Shennong Group (SH605296, stock price ¥34.66, market cap ¥18.191 billion) terminated its private placement, while Juxing Farming & Husbandry (SH603477, stock price ¥21.49, market cap ¥10.961 billion) extended the authorization period for its private placement by 12 months to August 22, 2026. Both companies' private placement plans involved expanding pig farming capacity.
Interestingly, on July 28, Shennong Group also released an equity incentive plan, which primarily assessed revenue, hog slaughter volume, and breeding costs—without mentioning scale-related indicators.
Private Placement Plan Involved Capacity Expansion
On the evening of July 28, Shennong Group announced that its board had approved the *"Proposal on Terminating the 2024 Private Placement of A-Shares to Specific Investors Under Simplified Procedures and Withdrawing Application Documents."* The private placement had begun on April 24, 2024, and had been in progress for over a year. On April 24, 2025, the plan was approved by the Shanghai Stock Exchange.
Why did Shennong Group decide to terminate the private placement? According to National Business Daily, the company cited changes in market conditions as the reason. After comprehensively considering factors such as capital market conditions and the company's overall development plan—and following thorough communication and careful analysis—Shennong Group decided to terminate the placement.
Under the original plan, Shennong Group aimed to raise ¥290 million, with ¥137 million allocated to the Wushan Township expansion project of Honghe Mile Shennong Livestock Co., Ltd., which was expected to produce 240,000 high-quality piglets annually.
On the same day, Shennong Group also disclosed a draft equity incentive plan. The performance targets included revenue, hog slaughter volume, and breeding costs—but no growth metrics for pig farming output.
For example, in the third vesting period, the company must meet one of the following two conditions:
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A revenue growth rate of at least 64% in 2027 compared to 2024, or
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A hog slaughter volume growth rate of at least 15% in 2027 compared to 2024, with a full breeding cost no higher than ¥12.20/kg.
Reporters noted that Shennong Group's full breeding cost in April 2025 was ¥12.30/kg. This suggests that the company is prioritizing quality over quantity in pig farming.
While Shennong Group terminated its private placement, Juxing Farming & Husbandry extended the validity period of its private placement authorization. The company announced that the resolution and authorization for the private placement would remain valid for 12 months from the date of approval at the third interim shareholders' meeting in 2024—i.e., from August 23, 2024, to August 22, 2025.
